Site MenuPolitical Financing Handbook for Nomination Contestants and Financial Agents (EC 20182) – October 2021
This document is Elections Canada's archived guideline OGI 2021-06 and is no longer in effect.
An updated version may be available in the Registry.
4. Transfers
This chapter explains the rules and procedures for accepting and sending transfers. It covers the following topics:
- What is a transfer?
- Transfers sent to the nomination contestant
- Transfers sent by the nomination contestant
- Party memberships purchased by the campaign
- Irregular transfers
What is a transfer?
A transfer is a provision of funds, property or services between specified political entities of the same political affiliation. Where specifically permitted under the Canada Elections Act, a transfer is not considered to be a contribution, and contribution rules therefore do not apply.
| Monetary transfer | Non-monetary transfer |
|---|---|
A monetary transfer is a transfer of funds. |
A non-monetary transfer is a transfer of property or services. The amount of a non-monetary transfer is the commercial value of the property or service. Unlike non-monetary contributions from individuals not in the business of providing that property or service, a non-monetary transfer has to be reported even if its commercial value is $200 or less. |
Transfers are permitted only between related political entities (registered party, electoral district association, candidate and leadership or nomination contestant) of the same political affiliation.
However, not all types of entities are authorized to provide all types of transfers. For a quick reference guide to eligible and ineligible transfers, see the Transfers—types and rules table in Chapter 1, Reference Tables and Timelines.
Note: If an invoice requiring payment is prepared by one political entity and sent to its related political entity, together with the original supplier invoice representing the commercial value of the goods or services provided, this is not a transfer but a sale of goods or services from one entity to another.
Transfers sent to the nomination contestant's campaign
Only the financial agent can accept transfers on the campaign's behalf. The following transfers may be accepted by the nomination contestant's campaign:
- property or services from the registered party or from any registered association of the registered party, as long as it is offered equally to all contestants
- property, services or funds from a candidate to themself in their capacity as a nomination contestant in respect of the same election
Example
The registered association creates a web page on its site for each nomination contestant for use during the contest period. The commercial value of creating the web pages is $150 per contestant. The association sends each contestant a copy of the original supplier invoice for $150 and reports a non-monetary transfer of $150 to each contestant. Each contestant reports a non-monetary transfer from the registered association and a nomination contest expense of $150.
Note: Transfers may not be accepted from provincial parties or electoral district associations of provincial parties. Transfers from a registered provincial division of a federal registered party are considered transfers from the registered party.
Transfers sent by the nomination contestant's campaign
Only the financial agent can send transfers on the campaign's behalf.
The following transfers may be sent by the nomination contestant's campaign:
- funds to a candidate of the same party in the electoral district in which the nomination contest was held (after election day, this is allowed only to pay claims and loans related to the candidate's campaign)
- funds to the registered association that held the nomination contest
- funds to the registered party
Example
Clara won a nomination contest and has started her election campaign. Clara's financial agent from the nomination campaign transfers $3,000 to the official agent for her election campaign to help with early expenses.
Party memberships purchased by the nomination contestant's campaign
Voting in a nomination contest is generally restricted to party members. For this reason, a nomination contestant's campaign will sometimes buy party memberships for its supporters. This is not prohibited by the Canada Elections Act. When a nomination campaign pays for memberships, the payment is recorded as a transfer to the registered party and is not subject to a limit.
More commonly, a campaign will collect party membership fees from individuals, deposit the funds into its bank account and then send the funds to the registered party. This transaction is also a transfer and is not subject to a limit. If the membership fee is no more than $25 per year for a period of no more than five years, the individuals have not made contributions and the registered party does not need additional information from the campaign. Above those thresholds, the campaign will need to provide the registered party with details to record contributions from the individuals.
Note: Some registered parties have internal rules that prohibit contestants from buying memberships for supporters. Campaigns should be aware of the rules that apply to their contest.
Irregular transfers
When the nomination contestant's campaign sends or accepts a transfer that is not permitted under the Canada Elections Act, the consequences will depend on the sender, recipient and transfer type.
The tables below deal with irregular transfers between affiliated political entities only.
| Recipient of irregular transfer sent by nomination contestant | Transfer type | Consequence |
|---|---|---|
| Candidate in same electoral district | Monetary, after election day other than to pay claims | Prohibited transfer with offence for sender; not a contribution |
| Candidate in other electoral district | Monetary | Improper surplus disposal with offence for sender; not a contribution |
| Candidate | Non-monetary | If capital asset, improper surplus disposal with offence for sender; not a contribution* |
| Nomination contestant Leadership contestant |
Any | Illegal contribution |
| Registered association that did not hold the contest | Any | Improper surplus disposal with offence for sender; not a contribution |
| Registered association that held the contest Registered party |
Non-monetary | If capital asset, improper surplus disposal with offence for sender; not a contribution* |
*Remaining non-capital assets or services can be provided to the candidate, association or party, but they must either be sold to that political entity or contributed by the contestant as a personal non-monetary contribution.
Example
Portia won a nomination contest and is now a candidate. Her nomination campaign sends a video used in the contest to her electoral campaign for reuse in the election period. This is not an allowable transfer. The video is not a capital asset, so there is no offence for the sender. However, Portia's electoral campaign must buy the video from the nomination campaign at its commercial value or accept the video as a personal non-monetary contribution from Portia (if she stays within the $5,000 limit on contributions to her own electoral campaign).
| Sender of irregular transfer accepted by nomination contestant | Transfer type | Consequence |
|---|---|---|
| Nomination contestant Leadership contestant |
Any | Illegal contribution |
| Candidate, other than from own campaign for same election | Any | Illegal contribution* |
| Registered association Registered party |
Monetary | Prohibited transfer with offences for sender and recipient; not a contribution |
| Registered association Registered party |
Non-monetary, not offered equally to all contestants | Prohibited transfer with offence for sender; not a contribution |
*If the transfer is non-monetary and the candidate offered it equally to all contestants, it is not a contribution. It may be an improper surplus disposal.
Example
A nomination contestant's campaign accepts funds from a candidate's campaign in an adjacent riding. This is not an allowable transfer. It is an illegal contribution. Within 30 days of becoming aware of the contravention, the financial agent must return the contribution to the sender (if unused) or remit the amount to Elections Canada.
OGI reference
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2020-07, Irregular Transfers Between Affiliated Political Entities, on the Elections Canada website.